Can a budget rule fix South Africa’s public finances?

South Africa’s public finances have come under sustained pressure over the past decade, with the country experiencing weak economic growth, poor revenue performance, and increasing demands on public spending. In this context, the government has been actively considering the introduction of a new fiscal anchor to restore and maintain fiscal sustainability, a commitment reflected in successive budget documents since 2019 and a 2020 IMF Letter of Intent. This brief draws on a structured review of international literature on fiscal rules and fiscal anchors, combined with applied analysis of South Africa’s own fiscal experience and institutional options. Rather than proposing a single solution, it explores the conditions under which fiscal anchors may support sustainable public finances, and highlights the design trade-offs involved. Numerical fiscal rules had been adopted in more than 100 countries by 2021, but with mixed success in constraining public debt and deficits; fiscal anchors, rules specifically designed to anchor expectations about the future course of fiscal policy — most commonly applied to debt sustainability — are a more targeted subset of these constraints. South Africa’s experience demonstrates that formal compliance with fiscal rules does not guarantee improved fiscal outcomes when growth is weak or institutional conditions deteriorate International evidence highlights important trade-offs between simplicity, flexibility, and enforceability in the design of fiscal rules Fiscal rules tend to be most effective when embedded within broader fiscal frameworks supported by transparency, accountability, and political commitment.